New HP continues to attack old CEO, Mark Hurd

Posted October 12, 2010 - 07:27
by
Mark Raby

HP essentially forced its once-heralded CEO Mark Hurd to resign because of a rush to judgment on a pending sexual harassment allegation, but now that its newly appointed CEO finds himself in bigger hot water, HP now has to play damage control yet again.

The huge computer giant has just hired a permanent replacement for Hurd: Leo Apotheker. But Apotheker doesn't come to the game with clean hands. Formerly an executive at SAP, he is a key part of an intellectual property theft case from business software company Oracle.

It's been a long-running case, but it is still very much an active lawsuit that could lead to a seven-figure damage outcome. Apotheker, some say, knew SAP was stealing intellectual property from Oracle but did nothing to stop it.

HP is now having to defend that Apotheker is a decent ethical businessman, and also that this hiring decision has nothing to do with the fact that Oracle is one of HP's biggest and most violent rivals.

So what's HP's strategy? Apparently it is to continue to kick Mark Hurd to the ground even though he's already been sacked.

In a letter to the New York Times, HP chairman Ray Lane says any assertion that Apotheker is more corrupt than Hurd is fallible on the face of it.

Hurd "lacked the trust and integrity needed to lead a public a company," wrote Lane. "Mr Hurd violated the trust of the Board by repeatedly lying to them in the course of an investigation into his conduct. He violated numerous elements of HP’s Standards of Business Conduct and he demonstrated a serious lack of integrity and judgment. The Board was unanimous in its decision that he must go, including the seven directors Mr Hurd recruited to the Board."

Hurd, once regarded as perhaps the strongest CEO the company had ever seen, whipped HP into shape in the wake of one of its biggest scandals and as stock prices were plummeting. He singlehandedly turned HP back into a well-oiled machine.

But things got dicey when a female employee and he went on long business meetings together and numbers on his expense reports didn't add up. The employee filed a claim of sexual harassment, which made its way to news media and caused the board of directors to issue a hurried plea for Hurd to step down. Once all the facts were on the table, Hurd was cleared of any sexual misconduct but his erroneous expense reports still raised red flags, and were enough to continue to justify his ousting.

Many, though, still see it as an unnecessary and unfair rush to judgment.